LaPORTE, J.
This appeal is from an order awarding approximately $6,000 in discovery sanctions. We affirm.
Plaintiff Edward Fletcher filed suit against defendants HPN Holdings, Inc., Street Strider International LLC, Garrett B. Watkins, and David W. Kraus in June 2010. According to the complaint, Street Strider International is a company that manufactures a "three-wheel mobile elliptical exercise bicycle" called the Street Strider, and HPN Holdings is a company that sells this product. Watkins was alleged to be the CEO and Kraus the president of both companies; the companies were claimed to be alter egos of the two men. At some point, another entity, Streetstrider Enterprises, Inc., was added as a defendant. Fletcher alleged that he entered into a contract with defendants under which he arranged for defendants to be loaned $500,000. In return, he received an exclusive right to sell the Street Strider and a share of profits. Fletcher also purchased shares in HPN for $100,000. Defendants allegedly failed to repay the loan as required by the contract, leaving Fletcher liable to the lender. The complaint alleged causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, fraud and misrepresentation, money had and received, breach of fiduciary duty, accounting, conversion, trespass to chattels, a violation of Business and Professions Code section 17500 et seq., and a violation of Business and Professions Code section 17200 et seq. It prayed for declaratory relief, an injunction to prevent defendants from selling products without first repaying the loan, damages in excess of $1 million, civil penalties, and other remedies.
Fletcher served deposition notices for defendants' corporate representatives or "Persons Most Knowledgeable" on August 16, 2011. The notices set the depositions for September 29 and 30, 2011. Each notice listed 11 subjects about which the corporate representatives would be deposed and requested that defendants produce documents in 47 categories. The depositions did not take place as scheduled, and in October 2011, following an unsuccessful mediation and proceedings to resolve other discovery disputes, Fletcher renoticed the depositions for dates in November 2011.
A scheduled trial date was approaching and the discovery cut-off was December 20, 2011. In spite of this, the parties agreed to reschedule the depositions for January 2012. In a series of telephone conversations, the parties' attorneys and members of their attorneys' staffs agreed to continue the trial date and set new deposition dates. On January 3, 2012, Fletcher served new deposition notices for January 9, 10 and 11, 2012. In telephone conversations on January 3 and January 6, 2012, counsel or members of their staffs agreed that the depositions would take place on January 10 and 11, 2012. Each notice listed 11 subjects about which the witness was to testify and requested production of documents in 71 categories.
On January 9, 2012, the parties executed a stipulation to continue the trial from January 17, 2012 to April 23, 2012. The stipulation was filed on January 10, 2012. It stated: "A continuance of the trial and related dates is necessary under the circumstances; depositions have not been finished." The portion of the stipulation that was prepared for the trial court's signature stated: "Based upon the Stipulation of the Parties and Good Cause Appearing the Mandatory Settlement Conference is now set for 3/28/12 @ 10 a.m.; Trial Readiness Conference is now set for 4/20/12 @ 9:30 a.m.; and the Trial date is now set for April 23, 2012 at 8:30 a.m., all dates in department 503 of the above court. All discovery dates are based on the new trial date."
Defendants' attorney, Peter Sean Bradley, filed a declaration on January 9, 2012, in support of the stipulation. It included the following paragraphs:
Bradley appeared at the offices of his own law firm with David Kraus to defend the deposition of Kraus as a corporate representative on January 10, 2012. Marlene Hubbell, of Bonnie Anderson's office, appeared to take Kraus's deposition on behalf of Fletcher. Moments after Hubbell began the deposition, Bradley interjected remarks that commenced a hostile exchange between counsel. The essence of Bradley's position was that he was not required to proceed with the deposition because, upon reading the most recent notices of deposition for the first time the day before, he found that their scope had been expanded, and he believed the agreement to extend the discovery cut-off was based on an implied condition that the scope would be the same as before. At the end of this exchange, Bradley terminated the deposition and left the room with Kraus. We reproduce a portion of the exchange here in the interest of conveying its flavor:
Fletcher filed a motion to compel depositions with production of documents on January 24, 2012, and an amended motion on February 2, 2012. The motion argued that Bradley, having agreed to extend the discovery cut-off for the purpose of completing the taking of depositions, and having never objected to defendants' last deposition notice, had no right to terminate Kraus's deposition before any questions were asked. The motion denied that Bradley conditioned his agreement to extend the discovery cut-off on a requirement that the scope of the depositions be controlled by a prior set of deposition notices. It also argued that Bradley had failed properly to identify any corporate representatives and that his offer to proceed question by question to determine whether Kraus was an appropriate representative was unsatisfactory.
The motion requested monetary sanctions in the amount of $6,061.40. This amount consisted of attorneys' fees for preparing and arguing the motion and appearing for the three depositions that did not take place, plus court reporter fees for those three dates, and the filing fee for the motion.
The motion to compel was supported by a declaration by Fletcher's attorney Hubbell. Hubbell declared that, on the morning of the Kraus deposition, while she and Bradley were waiting for a court reporter to begin the second day of Fletcher's own deposition, Bradley announced that, because he considered the scope designated in the new deposition notices to be too broad, he would not be producing any witnesses for corporate representative depositions. Then Bradley reversed course and pointed to Kraus, who was present to observe the Fletcher deposition, and said, "`We'll just produce him' . . . ." Bradley suggested proceeding "`question-by-question' to `see if' [Kraus] could answer each specific question and if not, then [defendants] would figure out who could." Hubbell "objected to this proposed method as inappropriate. . . ."
After Fletcher's deposition was finished, Hubbell, Bradley, and Kraus reconvened for Kraus's deposition as the corporate representative for HPN Holdings. The discussion reproduced above ensued, and Bradley and Kraus left. Later the same day and the next day, according to Hubbell's declaration, Hubbell appeared at the times and places appointed for the depositions of the corporate representatives of Street Strider International and Streetstrider Enterprises. No one appeared for defendants.
Hubbell's declaration stated that Hubbell faxed Bradley a letter on January 12, 2012, requesting to meet and confer on the rescheduling of the corporate representative depositions, and proposing a new schedule. Bradley did not reply until January 18. A further exchange of letters followed, but no agreement was reached. Bradley continued to maintain that the latest deposition notices were invalid because he had never agreed to an expansion in scope after the discovery cut-off, so he was not obligated to produce witnesses in response to those notices.
In their opposition to the motion to compel, defendants contended that they agreed to extend the discovery cut-off and produce corporate representatives to be deposed because Bradley "had previously prepared for the depositions" based on the prior deposition notices, and his "understanding" was that the scope of the depositions would be limited to the subjects listed in those notices. As evidence that the agreement to extend the discovery cut-off was mutually based on this understanding, defendants submitted a declaration by Bradley's assistant describing a conversation she had with defendants' attorney Anderson on January 3, 2012. The declaration stated that Anderson asked whether it would be necessary to serve new deposition notices. The assistant answered that it would not be necessary because deposition notices had been served previously. Defendants served new deposition notices the same day anyway. A declaration by Bradley stated that he never agreed with Fletcher's counsel to accept new deposition notices and he "assumed that we were verbally agreeing" to rely on the prior notices. Defendants conceded that, because Bradley was out of the office, he did not read the deposition notices served on January 3, 2012, until January 9, 2012.
After a hearing, the trial court granted the motion in a written order on February 29, 2012. It found that, on or before December 27, 2011, the parties made an informal oral agreement pursuant to Code of Civil Procedure section 2024.060 to conduct the corporate representative depositions after the discovery cut-off.
The court found that Bradley's failure to read the deposition notices served on January 3, 2012, was no excuse for his failure to be aware that the scope of the depositions had changed or to make a timely objection. Contrary to defendants' arguments, Fletcher did not "sandbag" defendants in this regard. The conversation between Fletcher's attorney Anderson and Bradley's assistant—in which Anderson asked whether new notices were needed and Bradley's assistant said no—did not show the contrary.
The court further concluded that the transcript of the attempted deposition of Kraus on January 10, 2012, showed that Bradley did not even claim Fletcher's counsel had no right to expand the scope of the depositions. Instead, he offered at one point to produce a witness responsive to the new notices on Friday, January 13, 2012. The court found that this meant Bradley was aware that there was no agreement to limit the scope of the depositions and that he was obligated to produce deponents under the new notices. Bradley's offer to proceed question by question to determine whether Kraus was the appropriate witness under the new notices, and to produce another witness if he was not, also reflected Bradley's awareness that there was no agreement to limit the scope of the depositions and that he was required to produce witnesses responsive to the new notices. The court summarized its findings on this point thus: "In short, the record appears to indicate that if [Bradley] had realized that [Fletcher] wanted to expand the scope of the depositions, he would have
The court found that the imposition of sanctions was justified. Defendants' failure to submit to the requests for corporate representative depositions was without substantial justification. Prior to the morning of the Kraus deposition, Bradley neither informed plaintiff of his objection to the requested scope of the depositions nor requested additional time to prepare for depositions with expanded scope. Instead, he walked out of the Kraus deposition before questioning began and failed to appear for the other two noticed deposition times. Bradley's continued insistence during the subsequent meet-and-confer process that there had been an agreement to limit the scope of the depositions—despite the lack of any evidence of this agreement—made plaintiff's motion to compel necessary. The costs claimed in the motion were reasonable. The court ordered defendants to produce deponents pursuant to the January 3, 2012, deposition notices no later than March 9, 2012, and to pay the requested amount of sanctions. It also ordered defendants to produce the requested documents.
An order awarding sanctions in excess of $5,000 is an appealable interlocutory order. (§ 904.1, subd. (a)(11).) Only the sanctions order is appealable; the underlying order compelling discovery is not. (Southern Pacific Co. v. Oppenheimer (1960) 54 Cal.2d 784, 786.) We review the sanctions order for abuse of discretion. (Vallbona v. Springer (1996) 43 Cal.App.4th 1525, 1545.) The trial court has abused its discretion only if its conclusions exceed the bounds of reason. (Kuhns v. State of California (1992) 8 Cal.App.4th 982, 988.)
A trial court may impose sanctions "against anyone engaging in conduct that is a misuse of the discovery process." (§ 2023.030.) Misuses of the discovery process include "[f]ailing to respond or to submit to an authorized method of discovery." (§ 2023.010, subd. (d).) Against "one engaging in the misuse of the discovery process, or any attorney advising that conduct," the court can impose a monetary sanction equal to "the reasonable expenses, including attorney's fees, incurred by anyone as a result of that conduct." (§ 2023.030, subd. (a).) If a monetary sanction is authorized, the court shall impose it "unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust." (Ibid.)
Defendants' argument in this case is that they acted with substantial justification in refusing to produce corporate representative deponents. The justification they offer is that their agreement to submit to the depositions after the discovery cut-off was subject to a condition that the scope of the depositions would be governed by the deposition notices served in November 2011. Since plaintiff served new notices with expanded scope and declared an intent to conduct the depositions under those notices, defendants claim they were under no obligation to produce witnesses.
As we will explain, the trial court did not abuse its discretion in finding that defendants' failure to produce corporate representative deponents lacked substantial justification. The evidence was sufficient to support findings that defendants agreed to an extension of the discovery cut-off in order to allow the corporate representative depositions without imposing any conditions on the scope of those depositions, and therefore had no grounds for refusing to submit to the depositions pursuant to the deposition notices served on January 3, 2012.
Section 2024.060 provides that the parties to an action can enter into an agreement to extend the time for completion of discovery. "This agreement may be informal, but it shall be confirmed in a writing that specifies the extended date." (§ 2024.060.)
The trial court reasonably found that the parties' stipulation to continue the trial date and Bradley's declaration in support of that stipulation were a confirmation in writing of the agreement to extend the discovery cut-off in order to allow the corporate representative depositions and the deposition of Fletcher. The court also reasonably found that the deposition notices served on January 3, 2012, were an additional writing confirming the agreement. Further, the court made a proper determination that the stipulation, which was executed only one day before the depositions were to begin and after Fletcher served the new deposition notices, waived the 10-day notice requirement of section 2025.270, subdivision (a).
The court also properly determined that, by failing to serve a written objection pursuant to section 2025.410, subdivision (a), defendants waived their objection to the scope specified in the deposition notices. Section 2025.410 provides that any claim that a deposition notice does not comply with article 2 of the Civil Discovery Act is waived unless promptly objected to in writing. Section 2025.230, mandating a description of the matters on which examination is requested in a notice of a corporate representative deposition, is within article 2.
The trial court could reasonably find that the evidence did not establish any term of the parties' agreement that would have limited the scope of the depositions allowed within the extended time. Presumably, section 2024.060 requires written confirmation of an agreement to extend discovery just so disputes over what was said can be avoided. The trial court could reasonably give greater weight to the written stipulation and supporting declaration, which omitted any reference to a scope limitation, than to the evidence of oral statements submitted by defendants.
Even when the evidence of oral statements is considered, it is far from compelling a finding that a scope limitation existed. Defendants cite remarks in Bradley's declaration: "I spoke to Ms. Anderson about permitting the taking of the depositions of the [persons most knowledgeable] which had previously been set. I expressed the idea that I would agree to that since I had already prepared them for their depositions." The court was not required, however, to find that the agreement included Bradley's unspoken assumption that, because he said he had already prepared witnesses for the depositions, the agreement included an implied term specifying that notices calling for additional preparation could not be served. In light of the writings memorializing the agreement, which said nothing about a scope limitation or about the prior notices, the court was not even required to credit Bradley's recollection of what he said to Anderson. Defendants also rely on the declaration by Bradley's assistant that Anderson asked the assistant whether new deposition notices were necessary and the assistant answered that they were not, since notices had been served before. But the court was not required to find an implied scope limitation based on this evidence either. Anderson hardly committed herself to not sending revised notices merely by asking this question.
Finally, even if the parties had agreed to limit the scope of the depositions as described in the prior notices, and even if defendants had not waived their objections to the scope as described in the new notices by failing to serve those objections in writing, Bradley's decisions to take his witness and walk out of the deposition before any questions had been asked, and to fail to appear for the other scheduled depositions at all, still would have been a sanctionable misuse of the discovery process. It is undisputed that the parties agreed that depositions of defendants' corporate representatives would take place after the discovery cut-off. Defendants had no right to refuse to submit to those depositions even if there was disagreement about their scope. By Bradley's own admission, he had already identified and prepared witnesses to respond to the prior deposition notices. Even if Bradley were entitled to rely on those notices (which, as we have said, the trial court properly held he was not), he could at most use them as a basis for objections during the depositions. Walking out and not coming back, and not appearing at the other scheduled depositions, were not among his legitimate options.
Although the parties have not mentioned it, another consideration supporting the trial court's order is that a deposition can be suspended without the stipulation of all parties only if a party or deponent demands suspension in order to make a motion for a protective order. (§ 2025.470.) Bradley made no such demand or motion. Consequently, he never asked the court for the remedies specified in section 2025.420, which provides in relevant part:
At the end of his brief, Fletcher asks us to award "costs and attorneys' fees on appeal" and alternatively asks us to remand the case to the trial court for the "purposes of affixing a further award of monetary sanctions so that [he] may recover his expenses—both attorneys' fees and costs, on this appeal." As the party prevailing on appeal, Fletcher is entitled to an award of costs on appeal. (Cal. Rules of Court, rule 8.278.) Fletcher cites no authority and presents no arguments in support of the other requested relief. Our rejection of the request for additional relief is without prejudice to any motion Fletcher may make on this subject in the trial court.
The order awarding sanctions is affirmed. Costs on appeal are awarded to respondent Fletcher.
Kane, Acting P.J. and Franson, J., concurs.
